Oil little changed as investors eye U.S.-Iran talks By Reuters



© Reuters. FILE PHOTO: Crude oil storage tanks are seen from above at the Cushing oil hub, appearing to run out of space to contain a historic supply glut that has hammered prices, in Cushing, Oklahoma, March 24, 2016. REUTERS/Nick Oxford

By Florence Tan

SINGAPORE (Reuters) -Oil prices edged down on Thursday, after rallying on an unexpected drop in inventories in the previous session, as investors await the outcome of U.S.-Iran nuclear talks that could add crude supplies quickly to global markets.

futures slid 7 cents, or 0.1%, to $91.48 a barrel at 0425 GMT, while U.S. West Texas Intermediate crude was at $89.62 a barrel, down 4 cents.

Robust demand recovery from the coronavirus pandemic has kept global oil supplies snug, with inventories at key fuel hubs globally hovering at multi-year lows.

U.S. crude inventories fell 4.8 million barrels in the week to Feb. 4, dropping to 410.4 million barrels – their lowest for commercial inventories since October 2018, the Energy Information Administration said. Analysts in a Reuters poll had forecast a 369,000-barrel rise.

U.S. product supplied – the best proxy for demand – peaked at 21.9 million barrels per day (bpd) over the past four weeks due to strong economic activity nationwide, EIA data showed.

“We are seeing some consolidation after a fairly constructive EIA report,” said Warren Patterson, ING’s head of commodities research.

However, investors are closely watching the outcome of U.S.-Iran nuclear talks which resumed this week. A deal could lift U.S. sanctions on Iranian oil and ease global supply tightness.

The White House publicly pressured Iran on Wednesday to revive the 2015 Iran nuclear agreement quickly, saying that it will be impossible to return to the accord if a deal is not struck within weeks.

“The core uncertainty remains whether Iran is willing to sign on the dotted line,” Eurasia analyst Henry Rome said, adding that the consultancy was holding onto a 40% call on a return to the agreement.

The restoration of sanction waivers to Iran to allow international nuclear cooperation projects, which were announced last week, along with some positive comments from Russian diplomats, suggest that the parties are moving closer towards a deal, Patterson said.

“Any quick deal would likely put some further downward pressure on prices, as it would help alleviate some concerns over the lack of spare OPEC capacity,” he added.

Separately, U.S. President Joe Biden and King Salman of Saudi Arabia discussed energy supplies and developments in the Middle East, including in Iran and Yemen, during a phone call on Wednesday.

Salman also spoke about maintaining balance and stability in the oil markets and emphasised the need to maintain the OPEC+ supply agreement, state news agency SPA said.

In Europe, U.S. Vice President Kamala Harris will be meeting allies and partners in Munich next week seeking to deter Russian aggression in Ukraine.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Share

Leave a Reply

Your email address will not be published.

GIPHY App Key not set. Please check settings